Current Oxford MBA student Charlotte Ntim gives her perspective on the Skoll World Forum seminar session ‘The Promise of Social Entrepreneurship in Emerging Markets’.

Charlotte Ntim

The topic of social entrepreneurship in emerging markets is admittedly broad. In a room of practitioners ranging from the head of impact at online crowd-sourcing platform Indiegogo, to representatives from Nigerian impact investing firm Doreo Partners, the possibilities of conversation were indeed endless.

The session’s moderator Randall Kempner  of the Aspen Institute focused discussions by drawing on a quote from Jeff Skoll the prior evening and the promise of “Good people doing good things” to change the status quo. In the impact investing landscape, there are many positives to draw on from the 3000 Ashoka investments to Acumen’s 80. But there are also some question marks. Drawing on the analogy of the impact investments accounting for the size of an index finger in the entire body of the investment landscape, Kempner challenged participants to consider the amount of “talk” found in social entrepreneurship, versus the actual amount of cheques. While transactions currently total approximately $19 billion globally, this figure is less than Walmart’s operating profit for the past year. And while the surface area of one’s index finger may make a relatable analogy, the fact that this forms the amount raised and not necessarily invested, makes impact investments a mere fingernail on the body of total transactional value of investments worldwide. While what followed were a string of lively debates, all appeared to agree that while promising, the industry has some ways to go.

emerging markets

The Promise of Social Entrepreneurship in Emerging Markets

One of these debates centred on the interaction between social enterprise and mainstream business practices and the balance of profit and purpose, in defining measurement metrics. Others like Unreasonable Capital’s Ashok Reddy, questioned the focus on funds raised as a metric of success, noting its use in private equity, and acknowledging that it may be too narrow an approach for fields that look beyond one bottom line. Following the trend of analogies, he drew on a comparison to cooking stoves – “How many are sold, versus how many are actually used”.

Another issue is how such metrics, once they were defined could be communicated to potential stakeholders. Was it really a question of “knowing your audience”? Indiegogo’s Gwen Nguyen drew on the example of Gravity Light, one of the platform’s most successful initiatives. After years struggling to raise capital from traditional sources due to their bottom-of-the-pyramid focus and low profit margin, the team was able to raise almost $400,000. A similar story is Kite Patch, who raised over $550,000. While objective successes in terms of funds raised, Nguyen stressed on the importance of efficient use of capital as opposed to explicit numbers.

For many practitioners in the room, there appeared to be a realist approach to the Rules of the Game in that the broader metrics applied in impact investing would not necessarily change things, but had forced practitioners to develop creative workarounds such as financing projects through strategic partners such as Telecoms companies. The topic inevitably found itself around the issue of government engagement and policy. Doreo Partners’ Kola Masha pointed to the fact that, in Nigeria as well as several other emerging markets, weak tax structures mean that governments draw little revenues from citizens and as such, have little incentive to invest in projects with impact beyond the bottom line. While the growth of the private sector provides hope, Masha pointed to the need for patience in affecting policy, noting the tendency for private sector players to gain more pull will government bodies, after several years of accumulating both financial and social acumen; it may simply be too early in the life cycle of many social enterprises and impact investors. That being said, the session stayed true to its title and the inspiring idealism of practitioners to hold onto the hope of improving access to finance, human capital and markets for social enterprises globally.